International donors have agreed to provide grants of €90 million to promote energy efficiency investments in Ukraine and other eastern European countries under a new Fund set up under the initiative of the Swedish government during its Presidency of the European Union.

The funding was agreed at the first pledging conference of the new Fund which took place on 26 November in Stockholm.

The Fund will be supported by grants from the government of Sweden, the European Union and other donors, including Ukraine. It is expected to complement energy efficiency loans provided by financial institutions including the European Bank for Reconstruction and Development, European Investment Bank, Nordic Investment Bank, Nordic Environment Finance Corporation and the World Bank Group.

It is expected that grant funding resources will be allocated to four priority areas: district heating in Ukraine, other energy efficiency projects in Ukraine, environment projects in Ukraine as well as projects in other countries in the EU’s Eastern Partnership Initiative.

In addition to promoting energy efficiency in district heating projects, funding will also support other investments aimed at making substantial energy savings. Environmental projects, such as waste water or renewable energy, will also be within the scope of the grant funding.

This initiative of the Swedish authorities is very important for Ukraine and other countries of the region, where high energy intensity is widespread and where there is a tremendous scope for efficiency improvement across all sectors.

Energy efficiency investments have the combined beneficial effects of boosting economic competitiveness, while enhancing energy security and also helping to combat the impact of climate change.